POLTICS AS USUAL (By Jim Baron) This is, indeed, the Year of Cities and Towns

February 5, 2012

Governor Chafee is right (thereâ€™s a phrase you donâ€™t see or hear in the media too often) to make 2012 the Year of Cities and Towns, and to focus his attention on helping the municipalities that are starting to fall like fiscal dominos, one crashing into the other as they fall until, looking from above, you see they spell out the message â€śRhode Island is screwed.â€ť
Cities and towns must thrive if the state is to be successful and prosperous. You canâ€™t have one without the other. As Providence Mayor Angel Tavares put it so vividly after the municipal executivesâ€™ meeting with the governor last month: â€śYou canâ€™t have a healthy body when your major organs are failing.â€ť
So now there is a major push on from the governor down through the mayors to gut union contracts and make city and town employees and retirees pay the bill for this fiasco.
Somewhere (probably in Florida, since this is February) former Gov. Donald Carcieri is smiling, perhaps even chuckling. This was his plan all along; it is just coming to fruition under his successorâ€™s administration.
The deep cuts in aid to cities and towns that Chafee decries so often and so loudly were made by Carcieri. Carcieri did not hate cities and towns. But he did hate unions. OK, maybe he didnâ€™t hate them, but he did want to see them shrivel up, die, and disappear from the Ocean Stateâ€™s landscape.
And this was the ultimate goal behind his cuts to the cities and towns. It is a strategy his fellow Republicans like to call â€śstarving the beast.â€ť In what would be familiar to billiards players as a â€śbank shot,â€ť Carcieri cut hundreds of millions of dollars in state aid to cities and towns knowing that, ultimately, they would have to go after their unions for massive givebacks. There would be no other option. Mayors and city and town councils, given a choice between raising property taxes that would get them voted out of office as well as ruin any political future they might have and going after the unions and their pensions, would choose the latter. Besides, you can raise property taxes only so high â€” especially on homeowners who are already upside-down on their mortgages â€” before those homeowners give up and either turn their keys into the bank or let their house go to a tax sale.
This isnâ€™t some idle speculation from a wise-guy columnist; Carcieri said it himself, many times, out loud and in front of microphones and TV cameras. When asked if his local aid cuts wouldnâ€™t cause property tax increases, Carcieri insisted that they shouldnâ€™t. He said cities and towns would have to take measures to rein in their employeesâ€™ union contracts and pensions the way he was in the process of doing with state employees. His measures are being challenged in court, where Judge Sarah Taft-Carter seems to be shooting them down, one by one.
Nonetheless, we are seeing Carcieriâ€™s plan play out in the cities and towns today.
The whole idea of Mayor Charles Moreau and the Central Falls City Council filing for bankruptcy in court was to allow them to void the cityâ€™s union contracts. State officials went apebleep when that happened, and within a couple of short weeks, Rhode Island had a brand new law where the state, not the individual cities and towns, would manage municipal fiscal crises and bankruptcies.
So Central Falls got a receiver (two, actually) and got the Bankruptcy Court to allow them to cut retiree pensions by more than half, and renegotiate all the municipal contracts. (A prediction: if the judge lets Receiver Robert Flanders void teacher union contracts as well, municipal bankruptcy will become as popular as free beer and iPhones.) East Providence has a budget commission, and Pawtucket Mayor Don Grebien and Woonsocket Mayor Leo Fontaine have avoided such action (so far) by layoffs and renegotiating union contracts. Carcieriâ€™s scheme is working.
Chafee, who ran as a friend of unions, is now preaching that giving up COLAs is preferable to getting your pension cut in half. It makes you wonder if state officials and municipal leaders in other communities cheered Central Fallsâ€™ bankruptcy because now they have a real-life worst case scenario to hold over the heads of unions everywhere else. Are they smart enough to be that Machiavellian, or did they just luck into this situation?
Unions canâ€™t be held completely harmless in all of this, either, especially in Providence. I think even Eugene V. Debs and Samuel Gompers would look at pensions with 5 and 6 percent compounding COLAs and say, â€śGee, thatâ€™s a bit excessive.â€ť That is especially true when those pensions are forcing current workers to face layoffs and no raises, or even pay cuts and furloughs.
Receivership has not been popular in Central Falls. People there have chafed at the notion of having some unelected guy walk in and take over the powers that rightly belong to the government officials they have elected. Providence may be trying to find a fiendishly clever way around this.
The word is, one of the things under consideration there is to appoint Mayor Tavares as receiver. That way, when Tavares rips up contracts or alters pensions, it wonâ€™t be some unelected interloper, it would be the mayor people elected. But he will be exercising powers that the City Charter and existing laws will not let him do now. Would he be able to relegate his City Council to an advisory capacity? What mayor wouldnâ€™t want that power?
Do we really want to tacitly acknowledge that democracy doesnâ€™t work in hard economic times, and what we need when things get tough is one-man rule, with extraordinary powers, to straighten things out? Call me an alarmist, but I think that is a bad precedent to set.
If Chafee wants to make this the Year of Cities and Towns, he should do more than nibble around the edges, adding $11 million to what the school funding formula already calls for.
You want to fix what is wrong with cities and towns and the property tax? Then the state should take over all schools, and fund them 100 percent from state general revenues. Then require that the cities and towns reduce their tax levies by the exact amount they were paying toward schools and limit future property tax increases to (at most) 2 percent a year.
You could have one commissioner of education and, say, three regional superintendents. Instead of having each district hire reading specialists and curriculum coordinators and all those other back-office bureaucrats, have one each. This would pave the way for one statewide teachersâ€™ contract, with pay scales and work rules that take into account the differences between teaching in urban and suburban school districts.
You would have to hike the income tax a bit, but that would be more than offset by property tax reductions. Taxpayers would like that. Businesses would like that. It might even improve education in many of our communities. Businesses would like that, too.
The year we do that would be the Year of Cities and Towns.